Apple revealed figures this past April that showcased disappointing earnings for its second fiscal quarter and a stock price that failed to match its forecasted number.
According to Fortune, Apple stated it sold 51.2 million iPhones in its second quarter, down from 61.2 million during the same quarter in 2015. In addition, earnings of $1.90 per share missed forecasted figures of $2, according to technology corporation Thomson Reuters.
In total, Apple’s revenue for its second quarter was $50.56 billion, falling for the first time since 2003.
Apple also made headlines this week after Berkshire Hathaway (BRKA), the conglomerate run by billionaire Warren Buffett, purchased more than 9.8 million shares in Apple (AAPL) during the first quarter. Buffet, 85, known as one of the world’s most intelligent investors, has had a long-held aversion to technology stocks, making this purchase one that goes against his principles.
Investors have been cautious when it comes to investing and analyzing Apple’s stock in the last couple of months. The company has been relying on the sales and longevity of its iPhone but with what recent earnings show, the product may be reaching a point of market saturation.
Last year, Apple unveiled the Apple Watch, the first new product since the death of former Apple CEO Steve Jobs. The product went on to sell more in its debut year than the iPhone, moving an estimated 12 million units where the iPhone only moved six million.
Yet, Apple’s failure to captivate anyone besides its core fanbase with a revolutionary new device has succeeded in making their company sag. This has made many question whether or not this dip is going to be a temporary error in need of a fix or a new norm for the tech titan.
Perhaps the sudden change of heart for Buffet comes at a time when Apple’s stock is down because of the fact that the shares are cheaper than they’ve been in a long time. If this really is a temporary slump for Apple, as some investors are calling it, perhaps Buffett will have struck gold when the company begins to climb to heights similar to its past.
Whenever specific companies’ stocks go south for a brief period, hysteria and proclamations of a company’s demise often prove to be premature and impulsive in the long-run.
Apple has seen significant lows in the company’s stock price in 2013 only to rise to historic heights in 2015. It’s very possible that the lows experienced currently are setbacks or preceding events to a very strong surge in both price and sales, especially with the iPhone 7 around the corner.
On another note, however, according to USA Today, investors have seen $240 billion in wealth disappear in Apple stock holdings since February 2015, a figure that exceeds losses stock investors experienced with the failed energy company Enron. Enron has gone on to be the textbook example for a terrible stock investment story.
The next few quarters will undoubtedly put Apple’s longevity to the test as a whole, with the serious possibility of it being just another disappointing period in preparation for more meteoric heights or the coming of a new trend that sees the bubble for the corporation exploding.
